SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

RULE 13d-2(a)

Under the Securities Exchange Act of 1934

(Amendment No.     )

 

 

Daseke, Inc.

(Name of Issuer)

Common Stock, $0.0001 par value per share

(Title of Class of Securities)

23753F 107

(CUSIP Number)

Lyons Capital, LLC

5000 Birch Street, Suite 5500

Newport Beach, CA 92660

(949) 474-5500

with a copy to:

Ryan C. Wilkins, Esq.

Stradling Yocca Carlson & Rauth, P.C.

660 Newport Center Drive, Suite 1600

Newport Beach, CA 92660

(949) 725-4115

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

April 8, 2020

(Date of Event which Requires Filing of this Schedule)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box.  ☒

 

 

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

 

(Page 1 of 8 Pages)

CUSIP No. 23753F 107		SCHEDULE 13D		Page 2 of 8 Pages

 

1		NAME OF REPORTING PERSON   Lyons Capital, LLC
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)  ☐        (b)  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   PF, OO
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)  ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   California
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   0
				8		SHARED VOTING POWER   3,250,000 shares of Common Stock
				9		SOLE DISPOSITIVE POWER   0
				10		SHARED DISPOSITIVE POWER   3,250,000 shares of Common Stock
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON   3,250,000 shares of Common Stock (1)
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES  ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)   5.0% (2)
14		TYPE OF REPORTING PERSON   OO

 

(1)	This amount reflects the number of shares of Common Stock, par value $0.0001 per share (“Common Stock”) of the Issuer that is beneficially owned by the Reporting Person.

(2)	There were 64,589,075 shares of Common Stock outstanding at December 31, 2019, as reported in the Issuer’s Annual Report on Form 10-K for the year ended December 31, 2019.

CUSIP No. 23753F 107		SCHEDULE 13D		Page 3 of 8 Pages

 

1		NAME OF REPORTING PERSON   The Lyons Community Property Trust, dated June 15, 1979
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)  ☐        (b)  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   PF, OO
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)  ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   California
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   0
				8		SHARED VOTING POWER   3,250,000 shares of Common Stock
				9		SOLE DISPOSITIVE POWER   0
				10		SHARED DISPOSITIVE POWER   3,250,000 shares of Common Stock
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON   3,250,000 shares of Common Stock (1)
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES  ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)   5.0% (2)
14		TYPE OF REPORTING PERSON   OO

 

(1)

This amount reflects the number of shares of Common Stock of the Issuer held by Lyons Capital, LLC, for which the Reporting Person is the sole member. The Reporting Person has the right to remove and replace the manager of Lyons Capital, LLC and so is deemed to be the beneficial owner of the reported shares of Common Stock.

(2)	There were 64,589,075 shares of Common Stock outstanding at December 31, 2019, as reported in the Issuer’s Annual Report on Form 10-K for the year ended December 31, 2019.

CUSIP No. 23753F 107		SCHEDULE 13D		Page 4 of 8 Pages

 

1		NAME OF REPORTING PERSON   Phillip N. Lyons
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)  ☐        (b)  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   PF, OO
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)  ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   0
				8		SHARED VOTING POWER   3,250,000 shares of Common Stock
				9		SOLE DISPOSITIVE POWER   0
				10		SHARED DISPOSITIVE POWER   3,250,000 shares of Common Stock
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON   3,250,000 shares of Common Stock (1)
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES  ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)   5.0% (2)
14		TYPE OF REPORTING PERSON   IN

 

(1)	This amount reflects the number of shares of Common Stock of the Issuer held by Lyons Capital, LLC, for which the Reporting Person is the sole manager. The Reporting Person is also the co-trustee of the Lyons Community Property Trust, dated June 15, 1979.

(2)	There were 64,589,075 shares of Common Stock outstanding at December 31, 2019, as reported in the Issuer’s Annual Report on Form 10-K for the year ended December 31, 2019.

Item 1.

SECURITY AND ISSUER.

This statement on Schedule 13D relates to the shares of common stock, $0.0001 par value per share (“Common Stock”), of Daseke, Inc., a Delaware corporation (the “Issuer”). The principal executive office of the Issuer is located at 15455 Dallas Parkway, Suite 550, Addison, Texas, 75001.

 

Item 2.

IDENTITY AND BACKGROUND.

(a) This statement on Schedule 13D is filed by Lyons Capital, LLC, a California limited liability company, (“Lyons Capital”), The Lyons Community Property Trust, dated June 15, 1979 (the “Trust”), and Phillip N. Lyons (“Phillip” and together with Lyons Capital and the Trust, the “Reporting Persons”). Neither the fact of this filing nor anything contained herein shall be deemed to be an admission by any Reporting Person that it and certain other persons constitute a “group.”

(b) The principal business address of Lyons Capital and the Trust is 5000 Birch Street, Suite 5500, Newport Beach, CA 92660.

The business address of Phillip is 5000 Birch Street, Suite 5500, Newport Beach, CA 92660.

(c) Lyons Capital’s principal business is to serve as a holding company.

The Trust’s principal business is to hold assets for the benefit of its beneficiaries.

Phillip’s principal occupation is a private investor.

(d) During the past five years, the Reporting Persons have not been convicted of a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the past five years, the Reporting Persons have not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Lyons Capital’s state of formation is California.

The Trust’s state of formation is California.

Phillip’s citizenship is of the United States.

 

Item 3.

SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

On December 1, 2017, the Issuer acquired 100% of the outstanding equity interests of Roadmaster Group, Inc. and its subsidiaries, and Roadmaster Equipment Leasing, Inc. and its subsidiaries (the “Roadmaster Acquisition”). In connection with the Roadmaster Acquisition, Lyons Capital received 3,114,247 shares of the Issuer’s common stock. The additional shares covered by this Schedule 13D include shares purchased in the open market, from time to time, by the Reporting Persons using personal funds.

Item 4.

PURPOSE OF TRANSACTION.

The securities referred to in this Schedule 13D were originally acquired by the Reporting Persons for investment purposes and not with the purpose or effect of changing or influencing control of the Issuer. The securities referred to in this Schedule 13D have been previously reported on Schedule 13G/A. However, this Schedule 13D is being filed due to several communications the Reporting Persons have had with the Board of Directors of the Issuer, including that certain letter issued by Lyons Capital to the Board of Directors of the Issuer, dated April 8, 2020, in which Lyons Capital called for the Board of Directors to evaluate all available opportunities to unlock stockholder value, including the following: (i) the addition of one or more highly-qualified stockholder representatives to the Board; (ii) the evaluation of the director compensation program; (iii) the adoption of best practices for stockholder and Board engagement; and (iv) the expedited implementation of operational improvement and strategic initiatives, and engage Lyons Capital to discuss these items. A copy of the letter is filed as Exhibit B to this Schedule 13D and is incorporated by reference into this Item 4.

In addition, the Reporting Persons have and intend to continue to engage in discussions with management and the Board of Directors of the Issuer about Issuer’s business, operations, strategy, plans and prospects, from time to time. The Reporting Persons may engage in discussions with management, the Board of Directors of the Issuer, stockholders or other securityholders of the Issuer and other relevant parties or take other actions concerning any extraordinary corporate transaction (including, but not limited to, a merger, reorganization or liquidation), a sale or transfer of a material amount of assets, a change in the Board of Directors or management, a material change in the capitalization or dividend policies, other material changes in the Issuer’s business or corporate structure, changes in the Issuer’s charter, bylaws or other actions that may impede the acquisition of control, de-listing or de-registration of the Issuer, other operational or strategic matters, or similar actions.

The Reporting Persons may in the future take actions with respect to their investment in the Issuer as they deem appropriate, including changing their current intentions, with respect to any or all matters required to be disclosed in this Schedule 13D.

The Reporting Persons may at any time and from time-to-time acquire additional securities of the Issuer or dispose of shares at prices deemed favorable on the open market, in privately negotiated transactions or otherwise.

Except as set forth above, at the present time the Reporting Persons have no plans or proposals which relate to or would result in (a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer, (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer, (c) a sale or transfer of a material amount of assets of the Issuer, (d) any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board, (e) any material change in the present capitalization or dividend policy of the Issuer, (f) any other material change in the Issuer’s business or corporate structure, (g) changes in the Issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person, (h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934 or (j) any action similar to any of those enumerated above.

 

Item 5.

INTEREST IN SECURITIES OF THE COMPANY.

(a) See rows (11) and (13) of the cover pages to this Schedule 13D for the aggregate number of shares of Common Stock and percentage of the shares of Common Stock beneficially owned by the Reporting Persons.

(b) See rows (7) through (10) of the cover pages to this Schedule 13D for the number of shares of Common Stock, as to which the Reporting Persons have sole or shared power to vote or direct the vote and sole or shared power to dispose or to direct the disposition.

(c) There have been no transactions with respect to Common Stock of the Issuer within the last 60 days by the Reporting Persons.

(d) No person (other than the Reporting Persons) is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock.

(e) Not applicable.

 

Item 6.

CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

No contracts, arrangements, understandings or similar relationships exist with respect to the securities of the Issuer between the Reporting Persons, and any other individual or entity.

 

Item 7.

MATERIAL TO BE FILED AS EXHIBITS.

 

Exhibit A		Joint Filing Agreement, by and among the Reporting Persons.
Exhibit B		Letter issued to the Board of Directors of Issuer, dated April 8, 2020.

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: April 15, 2020

 

Exhibit A

Joint Filing Agreement

In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them a statement on Schedule 13D (including amendments thereto) with respect to the Common Stock of Daseke, Inc., a Delaware corporation, and that this Agreement may be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.

[Signature pages follow]

IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing Agreement as of the dates set forth below.

 

Dated: April 14, 2020				LYONS CAPITAL, LLC
				By:		/s/ Phillip N. Lyons
				Name:		Phillip N. Lyons
				Title:		Sole Manager
Dated: April 14, 2020				THE LYONS COMMUNITY PROPERTY TRUST, DATED JUNE 15, 1979
				By:		/s/ Phillip N. Lyons
				Name:		Phillip N. Lyons
				Title:		Co-Trustee
				By:		/s/ Mary A. Lyons
				Name:		Mary A. Lyons
				Title:		Co-Trustee
Dated: April 14, 2020				/s/ Phillip N. Lyons
				PHILLIP N. LYONS

[Signature Page to Joint Filing Agreement to Schedule 13D]

Exhibit B

April 8, 2020

Daseke, Inc.

15445 Dallas Parkway, Suite 550

Addison, Texas 75001

Attn: Board of Directors

Board of Directors,

As you know, Lyons Capital, LLC, together with certain of its affiliates (collectively “we” or “us”), is a long-:term investor in Daseke, Inc. (the “Company”), and is presently the third largest stockholder of the Company. We own 3,250,000 shares of common stock, representing approximately 5% of the common stock outstanding, and have a significant vested stake in the value and success ofthe Company.

We are writing to you to raise serious concerns regarding certain actions of the Company and its Board of Directors (the “Board”), and to propose ways in which the Company and the Board can address these concerns. In response to this letter, we hope you will take prompt and decisive actions to safeguard and grow stockholder value.

Since January 2, 2018, under the leadership of the Board, stockholders of the Company have experienced unprecedented value destruction totaling in excess of $800 Million. On March 26, 2020, the Company’s credit rating was downgraded to B-and the Company was put on credit watch. As a significant and long-term stockholder, we have serious concerns and call upon you to act.

We are encouraged by the Company’s recent public announcement on April 1, 2020, that it will support, subject to stockholder approval at the Company’s 2020 Annual Meeting of Stockholders, the declassification of the Board and the annual election of all members of the Board, effective commencing with the 2021 Annual Meeting of Stockholders. However, we question why the Board waited years to take such a fundamental corporate governance action and believe it is in the best interest of stockholders for the Company to adopt other governance best practices at this time.

Despite what appears to be a promising first step in implementing a better corporate governance structure, the Company continues to significantly underperform in multiple respects, and the Board should take immediate and substantial steps to restore investor confidence and improve Company performance. This should include an evaluation of all available opportunities to improve corporate governance and unlock stockholder value such as the following:

 

•

The addition of one or more highly-qualified stockholder representatives to the Board;

 

•

The re-evaluation of the director compensation program - many companies have recently taken similar measures, including Occidental Petroleum, Farmers Brothers and Sabre, to name a few;

•

The adoption of best practices for stockholder and Board engagement (“Shareholder engagement is increasingly being added to the job description of the corporate director. The phenomenon is the natural evolution of the changes to the corporate governance landscape that have occurred during the last two decades. First, there is the expansion of the board’s oversight responsibilities that resulted from the Sarbanes-Oxley and Dodd -Frank legislations. Second, there is the progress made by the shareholder rights movement, with investors’ claim for a more direct involvement in business decision -making.” [Source: Harvard Law School Forum on Corporate Governance]); and

 

•

The expedited implementation of operational improvement and strategic initiatives.

Boardroom Representation

We believe there has been consistent and prolonged mismanagement of the Company’s operations, capital expenditures and capital allocation process. For example, in April2018, the Board approved the acquisition of Aveda, and in August 2018, the Board approved the acquisition of Builders Transport, resulting in the expenditure of approximately $150 Million in total consideration. Aveda and Builders have experienced significant downturns resulting in asset write-downs and rapidly shrinking EBITDA, less than 15 months from their respective acquisition dates. This and other poor capital allocation decisions contributed to the $300 Million impairment charge taken by the Company in the third quarter of 2019. The apparent lack of legal and financial due diligence conducted on behalf of the Company and the Board resulted in a massive destruction of stockholder value. Further, out of the 16 acquisitions made by the Company, four separate entities had to either be integrated into healthy operating units or shut down due to poor performance. The systematic destruction of stockholder value resulting from multiple acquisition opportunities is not simply bad luck; it reflects poor management decisions and lack of Board oversight.

Further, we are concerned that in August 2019, the Board forced the resignation of select members of the Company’s senior management team and then entered into overly generous Separation Agreements with these persons based on the Company’s poor performance prior to the resignations. In addition, in connection with Don Daseke’s Separation Agreement, the Board required him to vote his shares, representing 28% ofthe shares of common stock of the Company outstanding, in favor of the Board nominated directors (Messrs. Bonner, Shepko and Serianni, at the time). This transaction essentially reflects the Board buying his votes as a way to entrench the incumbents.

In light of the Company’s poor performance and questionable governance decisions, it is imperative for the Board to have stockholder representation with relevant knowledge and experience to ensure that it pursues the best path forward for the Company and holds management accountable to drive strong operational and financial results. The Board oversees the management team operating the business, sets the Company’s overall operational and growth strategy, and drives the monetization of the valuable assets held by the Company. We believe that only through a concerted focus on improved strategic oversight will the Company be able to overcome the challenges it currently faces that threaten long-term value creation and growth. We believe the Board can take an important step towards restoring credibility with investors by agreeing to add one or more highly-qualified stockholder representatives to the Board. We would initially propose the addition of Grant Garbers to the Board. Mr. Garbers has significant transportation knowledge and experience as a result of being a special advisor and board member of

 

Page 2 of 4

Roadmaster Group, a leader in the transportation of high security freight and a Daseke operating company, for approximately 11 years, and has extensive experience in M&A and capital markets, having spent his professional career in the investment banking field. We further believe the appointment of Mr. Garbers would be supported by a majority ofthe stockholders. Mr. Garbers’ appointment to the Board would demonstrate the Board’s alignment with the interests of stockholders, and would add a fresh perspective, a relevant skillset and meaningful experience to the Board. We would also welcome the opportunity to have a dialogue with the Board about the potential to add other members, including the appropriate skillsets and qualifications that should be identified in any future director nominees.

Director Compensation

Despite the Company’s poor financial performance and declining stock price, the Board continues to receive compensation benefits that are excessive. In the fiscal year 2018, the Board received cash compensation of approximately $485,000 and stock awards valued at approximately $52,000 per Board member. In fiscal year 2020, the pro-forma cash compensation equates to approximately $1,200,000, an increase of$715,000 or 147%, as well as incremental stock compensation representing approximately 1% ofthe outstanding shares of common stock ( 664,000 shares, inclusive of the Bonner employment agreement).

Additionally, in August/September 2019 the Board appointed Brian Bonner the Executive Chairman, with a compensation package that includes, among other things, a $600,000 base annual salary and 500,000 shares of common stock, thereby making a part-time employee the most highly compensated person in the Company. At the same time, Mr. Bonner was provided with a guaranteed employment arrangement, while the other senior executives of the Company do not have employment contracts.

The Board should re-evaluate the compensation paid to the Board members, in particular in light of the continued poor performance of the Company. In this regard, we propose that Messrs. Bonner, Shepko and Charlton voluntarily rescind the egregious stock awards granted to them last year and that all Board members voluntarily reduce their annual cash retainer and forego any incremental cash compensation previously granted for 2020, retroactive to January 1, 2020.

Stock Ownership Guidelines

We think the Board should immediately adopt Stock Ownership Guidelines applicable to all of its directors and officers, which we believe would demonstrate the Board’s commitment to, and restore confidence in, the Company and its stock. The adoption of Stock Ownership Guidelines is a standard governance practice at this point and the Board has been remiss in not adopting them previously.

Other Matters

In addition to the matters and issues set forth above, we would like to engage with the Board to discuss other corporate governance, operational improvement and strategic initiatives.

 

Page 3 of 4

Conclusion

We continue to believe in the Company’s ability to realize strong financial and operational performance, and to achieve significantly increased value for all stockholders. We would prefer to work collaboratively with the Board to address the critical issues facing the Company, although the systematic destruction of stockholder value over time without any meaningful response from the Board or management necessitates that we keep all of our strategic options on the table.

We look forward to engaging in constructive and cooperative discussions with the Board on how best to unlock stockholder value and lead the Company forward. We look forward to your prompt reply.

 

Regards,
Lyons Capital, LLC
By:
Name:		Phillip N. Lyons
Title;		Managing Member

 

 

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